Retail

New Research Finds Gift Cards a Preferred Consumer Incentive

New study from Blackhawk Network finds preference for gift cards over discounts

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by Alex Palmer |
July 16, 2018

Enticing consumers to buy a new product or deepen their loyalty is a bit easier to do when merchants use gift cards as incentives, a new study finds. According to the "2018 State of Consumer Gift Card Preferences" from financial tech and branded-value-solutions company Blackhawk Network, 80 percent of consumers surveyed found gift cards to have a greater influence on their purchase decision than coupons or bonus dollars. Additionally, more than half (52 percent) of respondents said they would be more likely to stay engaged in a loyalty program if incentivized by gift cards rather than other options such as discounts or airline miles.

The research, which drew on the online responses of 3,030 U.S. adults, asked about a wide range of preferences around gift cards, both as consumers and employees. For the latter, 69 percent of respondents said they would like to receive a gift card as a reward from an employer.

"Gift cards hold mass appeal, and offer a seemingly endless range of options -- physical, digital and mobile -- giving brands and organizations new ways to engage with their audiences," said Talbott Roche, chief executive officer and president, Blackhawk Network, in a statement. "As consumer gift card purchasing and usage preferences continue to evolve, there will be more opportunities for merchants to drive traffic, sales and loyalty with their own gift card programs. Businesses can prepare themselves by considering consumer insights and embracing the changes coming to our industry."

The findings pointed to growing interest in digital gift card options, with more than half saying they would be interested in giving digital gift cards that could be added to a mobile app or digital wallet (these were especially of interest to Millennials, with 69 percent of that group expressing interest; and smartphone users, with 59 percent expressing interest).

Millennials also affirmed their interest in "contextual commerce," in which purchases are made seamlessly within social media platforms or other places the consumer is already visiting. Sixty percent of 18-34-year-olds said they would be interested in receiving a gift card through a social networking platform or messaging app, while 54 percent said they would be interested in giving such a card.

Personalization also proved key to recipients, with more than 60 percent of respondents saying they felt a greeting card or a gift card personalized with their own message makes a gift feel more thoughtful. Between 30 and 40 percent of consumers said they would be encouraged to spend more on a gift for personalization options, whether that be a message, gift wrap, video or photo.

"Despite growth in digital, the demand for physical gift cards is still strong and, in many cases, preferred," said Roche. "But even as consumer attitudes shift toward digital gift cards, there is still a need for both mediums as part of consumers' omnichannel journey. A big opportunity for both physical and digital growth lies with brands and organizations taking the personalization of gift cards to the next level."